news.cuna.org/articles/NCUA_posts_updates_on_guaranteed_notes,_corporate_resolution_program

NCUA posts updates on guaranteed notes, corporate resolution program

November 25, 2014

ALEXANDRIA, Va. (11/26/14)--Updated information on the performance of the National Credit Union Administration's Guaranteed Notes program and costs of the corporate credit union resolution program have been posted to the agency's website.

The information was previously covered at the agency's last board meeting; however, the website features the updated figures and new infographics.

According to the agency, the Temporary Corporate Credit Union Stabilization Fund assessment range is from negative $2.2 billion to negative $200 million, making it likely that credit unions will not be charged future assessments.

Click to view larger imageTotal corporate credit union system resolution costs and net remaining assessments, in billions. (NCUA Graphic)

"However, the projections are subject to change based on the performance of the failed corporates' legacy assets, future legal recoveries and economic variables such as interest rates, unemployment and housing costs," reads a statement from the NCUA.

Credit unions have paid $4.8 billion in assessments since the creation of the Stabilization Fund in 2009.

The agency also said the negative balance will not result in refunds for credit unions in 2015, due to the $2.6 billion in outstanding borrowings to the U.S. Treasury, Guaranteed Notes principal and interests, as well as other obligations of the stabilization fund. Refunds are unlikely until at least the expiration of the Stabilization Fund in 2021.

In addition to the updates, the agency has posted a question-and-answer document with detailed information about costs incurred to date and projected future assessment ranges over the life of the Stabilization Fund.

According to the NCUA, it will provide periodic updates on the estimates about the costs associated with the corporate system resolution, the performance of the Guaranteed Notes program and the total anticipated assessments credit unions will pay during the life of the Stabilization Fund.